Deciding Whether to Hire One or Multiple Consultants

Deciding to engage one or multiple vendors to support a transformation program depends a lot on your organization and the scope. Let’s take a look at each option and its advantages and challenges, then look at a few questions to ask to help the decision making process.

Hiring a Single Firm
You may have heard that “no one gets fired for choosing IBM”. Whether you agree with that is a different story.

The benefits of this approach is that it can:

  • Streamline conversations
  • Centralize project management
  • Drive efficiency, especially by offloading responsibility.

However, it also comes with challenges:

  • Finding a firm that excels in every area you need can be hard to impossible
  • Firms that have multiple specialties are expensive and often do engage in lower market segments
  • Introduces risk in what is delivered unless oversight exists

This approach works well in three scenarios:

  1. Pure execution: you already know what and how something needs to be done, but don’t have bandwidth (e.g. outsourcing marketing content creation)
  2. Tight scope: you have a scope limited to one or two domains (e.g. refresh the brand identity and overhaul the website)
  3. High complexity: you have a multi-phase program that touches many or all parts of the organization and could never do it yourself (e.g. modernize CRM, ERP, and e-commerce for a multinational B2B/B2C brand)

Hiring Multiple Firms
Composing a stable of specialists allows you to optimize for different levers within the “pick two” of quality, budget, and time spent.

The benefits of this approach is that it can:

  • Match you with a firm that can deliver on those at the level you need
  • Switch firms as needed without putting the entire program at risk
  • Adapt as your transformation evolves to get the right expertise at each stage

However, it too comes with challenges:

  • Overseeing multiple vendors and coordinating them is resource intensive
  • Conflicts will arise that you need to manage (whereas a single firm model would likely handle those within itself)
  • Timelines might naturally extend due to dependencies and availability

This approach works well in three scenarios:

  • Strong management: you have the internal capability to manage projects and programs well, which reduces the risk of multiple vendors executing concurrently (e.g. coordinating a web agency, CRM implementer, and brand strategy team)
  • Specialized expertise: you require niche skills that are not possible to find in a single firm (e.g. a COBOL developer, CRM implementer, and a digital agency for a regional bank)
  • High quality: you need the highest level of quality across multiple domains (e.g. launching a revolutionary hardware product supported by software)

Questions to Ask
If you answered yes to most of these, you’re likely equipped to hire multiple firms.

  • Do you have a clear vision of where you want your organization to be?
  • Does your organization have a collaborative leadership team?
  • Do you have in-house expertise in managing multi-department projects?
  • Do you know the sequence of projects needed to maximize value as a program progresses?
  • Has your team worked (well) with multiple consultants before?
  • Are you aware of the technology platforms available to support your vision?

TLDR: Multiple firms yield better outcomes if you’re prepared for it. Single firms can work as well for the shoulder cases (small scope, huge complexity).